Value Delivery Network For The Airline Industry example essay topic

Value Delivery Network A value delivery network allows many companies to create customer value that cannot be created by use of the company's own value chain. A "Value delivery network", is made up of the company, suppliers, distributors, and ultimately the customers who partner with each other to improve the performance of the entire system (Armstrong et al. 52). This type of system interests me because I have always been curious as to what path a product or service must take in order to be considered a "value" to a customer. Generating my interest during one of the case studies during class, Accenture is a company that has improved the value delivery network for many companies. Accenture has improved not only the value delivery system for the airline industry, but its own global delivery system with its partner BT.

Accenture found the need to introduce e-commerce to the airline industry's line of services to its customers. E-commerce, as Accenture puts it; reduces costs, maximizes information about customers, allows targeting certain distribution channels, differentiates products, establishes long term relationships, and creates lifetime loyalty; all of which creates value in the delivery network (Stewart). E-commerce allows the airline industry to connect to its customers directly and with third party electronic channels that provide value to customers in ways unknown in the traditional distribution cycle (Stewart). As a consulting firm, Accenture not only improved the value delivery network for the airline industry, but for its partner BT. Signing a 10-year, $575 M outsourcing contract w / BT, Accenture has essentially expanded its geographic reach of services provided to BT within the global market.

Services provided under the new contract include customer contact / call center, recruitment, pension administration, payroll and benefits administration, performance management administration, health and safety, and HR advisory and information services. By outsourcing most of its services to Accenture, BT improves its value delivery network by providing lower costs and higher quality services to its customers. As stated by BT's Alex Wilson, 'Accenture HR Services has a proven track record of consistently high quality service and a true partnership approach. These were key factors in its selection, along with its unmatched ability to deliver HR services on a global basis. This agreement will allow our staff to concentrate even more on the strategic role of HR management to our growing global business.

' Just as Honda has outsourced all of its automobile mirror operations to Donnelly Corporation benefiting both companies in terms of increased performance and passing the value on to its customers (Armstrong et al. 52), BT and Accenture have benefited each other by allowing BT to focus its efforts on the strategic of its HR Management, and allowing Accenture to gain much needed confidence from its other customers (Business Wire). The value delivery network for both companies has clearly improved. As referenced, the value delivery network consists of all the companies within a delivery network working together to reach a common goal of customer perceived value. When businesses within a delivery network partner together, it is their goal to reduce costs, increase performance, and pass the increased productivity on to their customers.

Armstrong, Gary, and Philip Kotler. Marketing: An Introduction. 7th ed. Upper Saddle River: Prentice Hall, 2005. Business Wire. 'BT and Accenture Sign 10-Year Outsourcing Contract to Transform and Expand HR Services; Services to...

' HR marketer. com 02 2005.12 May 2005 Stewart, Ron. 'Direct Distribution in the Airline Industry. ' Unlocking the Power of Customer Relationships. 15 2002. Accenture. 12 May.

2005.